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In re Cotton

United States District Court, W.D. North Carolina, Charlotte Division

March 14, 2019

WELLS FARGO & CO. and WELLS FARGO BANK, N.A. Defendants. CHRISTOPHER DEE COTTON and ALLISON HEDRICK COTTON, on behalf of themselves and all others similarly-situated, IGNACIO PEREZ And GABRIELA PEREZ, On behalf of themselves and all others similarly-situated, Plaintiffs, ADVERSARY NO. 17-03056



         THIS MATTER is before the Court on two pending motions: (1) Plaintiffs' Motion for Final Certification of Settlement Class and Final Approval of Class Action Settlement, (Doc. No. 10); and (2) Plaintiffs' Motion for Attorneys' Fees and Non- Taxable Costs and Class Representative Service Awards, (Doc. No. 4); and the Parties' associated briefs and exhibits. The Court will address each motion in separate parts of the Order.


         This matter came before the Court for hearing on the application of the Parties for approval of the Settlement Agreement and Release dated August 31, 2018 (the “Agreement”). On November 2, 2018, the United States Bankruptcy Court for the Western District of North Carolina (the “Bankruptcy Court”) granted preliminary approval to the proposed class action settlement set forth in the Agreement between Plaintiffs Christopher Dee Cotton, Allison Hedrick Cotton, Ignacio Perez, and Gabriela Delfina Perez (the “Class Representatives”), on behalf of themselves and all members of the Class, and Defendant Wells Fargo Bank, N.A (“Wells Fargo Bank, ” and, collectively with Defendant Wells Fargo & Co., the “Defendants”). The Bankruptcy Court also provisionally certified the Class for settlement purposes and approved the procedure for giving Class Notice to the members of the Settlement Class. This Court granted the Parties' Joint Motion to Withdraw the Bankruptcy Reference and set a Final Approval Hearing to take place on March 4, 2019 (Doc. No. 6). This Court finds that the Class Notice substantially in the forms approved by the Bankruptcy Court in the Preliminary Approval Order was given in the manner ordered by the Bankruptcy Court, constitutes the best practicable notice, and was fair, reasonable, and adequate.

         On March 4, 2019, this Court held a duly noticed Final Approval Hearing to consider, among other things: (1) whether to certify the Class for settlement purposes; (2) whether the terms and conditions of the Agreement are fair, reasonable and adequate; (3) whether a judgment should be entered dismissing the Class Representatives' Released Claims on the merits and with prejudice; and (4) whether and in what amount to award attorneys' fees and expenses to Class Counsel for the Class.


         1. Definitions. This Judgment incorporates by reference the definitions in the Agreement, and all capitalized terms used, but not defined herein, shall have the same meanings as in the Agreement.

         2. Jurisdiction. This Court has jurisdiction over the subject matter of the Action and over all parties to the Action, including all Members of the Class, and venue in this Court is proper.

         3. No Merits Determination. By entering this Order, the Court does not make any determination as to the merits of this case.

         4. Settlement Class. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby finally certifies, for settlement purposes only (and for no other purpose and with no other effect upon the Action, including no effect upon the Action should the Effective Date not occur), this Action as a class action, with the Class defined as those individual borrowers who (i) maintained a home mortgage loan owned or serviced by Wells Fargo Bank, (ii) are currently or were formerly in a Chapter 13 bankruptcy case, and (iii) were solicited by Wells Fargo Bank for a No-Application Modification within 120 days prior to or any date after the filing of the petition for the Chapter 13 bankruptcy or the date of conversion of a Chapter 7, 11, or 12 bankruptcy to a Chapter 13 bankruptcy, and prior to final dismissal or discharge of such Chapter 13 bankruptcy case. The Court finds, for settlement purposes only, that class certification under Fed.R.Civ.P. 23(b)(3) is appropriate in that, in the settlement context: (a) the Members of the Class are so numerous that joinder of all Class Members in the class action is impracticable; (b) there are questions of law and fact common to the Class which predominate over any individual question; (c) the claims of the Class Representatives are typical of the claims of the Class; (d) the Class Representatives and their counsel will fairly and adequately represent and protect the interests of the Class Members; (e) the class is ascertainable; and (f) a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

         5. Designation of Class Representatives and Class Counsel. The Court confirms the prior appointments of the Plaintiffs Christopher Dee Cotton, Allison Hedrick Cotton, Ignacio Perez, and Gabriela Delfina Perez as Class Representatives, and Theodore O. Bartholow, Karen L. Kellett and O. Max Gardner (of counsel) of Kellett & Bartholow PLLC, Derick Henderson of Sigmon & Henderson, PLLC, and Abelardo Limon of Limon Law Office as Class Counsel.

         6. Settlement Approval. Pursuant to Federal Rule of Civil Procedure 23, this Court hereby approves the Settlement set forth in the Agreement and finds that the Settlement is, in all respects, fair, reasonable and adequate to the Parties. The Court further finds that the Settlement set forth in the Agreement is the result of good faith arm's-length negotiations between experienced counsel representing the interests of the Parties. Accordingly, the Settlement embodied in the Agreement is hereby finally approved in all respects, there is no just reason for delay, and the Parties are hereby directed to perform its terms.

         7. Dismissal with Prejudice. Final Judgment is hereby entered with respect to the Released Claims of all Settlement Class Members, and the Released Claims in the Action are hereby dismissed in their entirety with prejudice. The Amended Complaint is dismissed, and the Action shall be closed. All claims in the Action are dismissed. Nothing herein is intended to waive or prejudice the rights of Class Members who have timely excluded themselves from the Class, as identified in Exhibit E of the Declaration of James Parks Regarding Class Notification and Settlement Administration filed with the Court on February 18, 2019. See Doc. No. 11-10 at 41.

         8. Releases. The releases as set forth in Section 10 of the Agreement together with the definitions in Sections 1.1-1.57 relating thereto are expressly incorporated herein in all respects and made effective by operation of this Judgment. The Court hereby approves the release provisions as contained and incorporated in Section 10 of the Agreement, including but not limited to the definitions of Released Claims, Releasors, Releasees and Unknown Claims. The Releasors shall be deemed to have, and by operation of the Judgment ...

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